Central banks in South Africa and Australia raise interest rates

Central banks in South Africa and Australia have implemented interest rate hikes to combat economic pressures.

The South African Reserve Bank raised the repo rate from 7% to 7.25%, with the prime lending rate moving to 10.75%. The decision was unanimous, a move that surprised some economists who expected a closer vote. Governor Lesetja Kganyago cited rising oil prices linked to geopolitical tensions involving Iran as the primary driver, noting that South Africa is currently under-recovering fuel costs, which may lead to further pump price increases in October.

In Australia, the Reserve Bank of Australia's monetary policy board is expected to lift the official cash rate by 0.25% to 4.6%. This move aims to manage inflation amidst a strong labor market, rising diesel prices, and global bond market volatility. The hike would represent the highest interest rate level in Australia since November 2011.